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Shell Ends The Year On A Positive Note, Gets Drilling Permission In Ireland

Shell hasn’t had a good 2015. Beyond the scourge of low oil prices, which afflicts all energy companies, the Anglo-Dutch giant also had to abandon plans to drill in the Arctic Ocean off Alaska’s coast, and its once-heralded deal to buy BG Group for nearly $70 billion has begun to look like it might be a bad decision.

But on Wednesday, with two days to go before the New Year, Shell announced that it had begun piping gas from one of Ireland’s biggest sources of energy, the Corrib field about 50 miles off County Mayo in the Atlantic Ocean, ending nearly 20 years of waiting while Irish authorities sorted out questions about the project’s safety and environmental impact.

Enterprise Oil PLC discovered the field in 1996, and Shell bought Enterprise six years later. Working with Norway’s Statoil and Vermilion Energy Ireland Ltd., Shell had planned to set up an onshore pipeline to move the Corrib gas to a terminal at Bellanboy, but couldn’t break through local opposition. So Shell shifted the route, which included a tunnel about three miles long – the longest in Ireland – beneath Sruwaddacon Bay.

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While opponents expressed concern about the pipeline’s safety and potential environmental dangers, supporters said the project would create jobs in the region and help the country become more energy independent. Dublin says Ireland now produces only about 5 percent of the gas it needs, while the addition of the Corrib gas would raise that to 60 percent.

Philip Robinson, a spokesman for Shell, said it appears the company’s efforts to overcome local opposition to the project had succeeded. As a result, Alex White, Ireland’s minister for communications, energy and natural resources, issued the government’s final approval on Tuesday, but added 20 conditions that included the company’s close attention to the pipeline’s environmental impact.

White said the decision was based in part on the country’s efforts to reduce emissions of greenhouse gases, and that an increased use of gas, which is inexpensive and burns cleaner than other fossil fuels, would help Ireland shift eventually to even greener energy technologies.

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Besides, White said, domestic gas, rather than imported fuel, “will deliver significant and sustained benefits, particularly in terms of enhanced security of supply” for the country, as well as its economic development.

Pat Shannon, chairman of the trade group known as the Irish Offshore Operators’ Association, seconded that assessment. He noted that Atlantic Margin, the area beneath the ocean where Corrib is situated, likely will be found to have other generous sources of energy. “I think this is a very significant day for the exploration industry in Ireland,” he said.

Opposition from environmentalists may have waned, but it’s present nonetheless. Terence Conway, a spokesman for one group, Shell To Sea, complained that, on one hand, the government demands that protesters obey the country’s laws in their demonstrations. On the other, though, he said, “[T]here is one law for them, another law for us.”

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Conway called Shell “one of the most destructive companies the planet has ever seen.”

And on Dec. 14, Ireland’s High Court ruled that four veteran protesters against the project may appeal the decision by the country’s Environmental Protection Agency to let Shell go ahead with the extraction and distribution of Corrib gas.

By Andy Tully of Oilprice.com

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